Thomson Reuters Eikon: What Went Wrong?

Market observers say a confluence of factors have contributed to the sluggish start for Thomson Reuters' Eikon, the company's next generation market data desktop.

Larry Tabb, CEO of the research and consulting firm TABB Group, agrees. "We're in very challenging markets and people don't want to pay as much for market data platforms," he says. "In addition, they're fighting Bloomberg, who is a very strong competitor who has had a fairly consistent platform for 30 years. Making headway into taking market share from Bloomberg in six months is very challenging."

Another industry source with knowledge of the platform said, "They are having platform problems. It's not stable and not rolling out the way it was supposed to. They are having a lot of trouble getting it out to the market."

Eikon was touted as being easy to use, implement and easy to manage from afar -- without having to manage dozens of disks, etc., the source noted. "It looked good and seemed like it was moving in the right direction. But as they transitioned the technology, it's been difficult to get everything to work," he said.

When asked to comment on the roll out or integration issues, Brittan denies these types of major issues and reiterates that many firms have migrated to the new product. "There were some kinks that needed ironing out early on, but this makes it sound like we have hit a wall that is absolutely not the case," he says. "We are continuing to sell Eikon, the feedback has been positive, and at no point has there been the friction that this suggests. "

CHANGES IN MANAGEMENT
Brittan said he was not privy to the details behind the management changes, but he does not attribute them to Eikon's performance. Management changes are often par for the course when companies go through a complex merger. He chalks up the moves to a change in style and strategy as the company moves into a new phase. The development of Eikon, the company's next generation market data desktop product, supports this new direction.

FUTURE OF EIKON?
With a new chief stepping in January 1, how will the company proceed with Eikon? Industry executives agree that Thomson Reuters will continue to work through the issues with the platform. "They don't have a choice, there is too much money invested in it," the unnamed source says.

Brittan reiterates that Thomson Reuters is committed to Eikon. "It is still clear to me that the product is the future of the company and that commitment has never waned," he says. "I think it's exactly the right strategy to bring all of our customers onto one single platform and allow our customers to leverage that set of assets in a much more powerful and flexible way."

Transitioning clients to the new platform and gaining market share may take some time. Tabb notes, "It took thirty years for Bloomberg to get where they are, this is not going to be a one year battle." He explains that firms become very dependent on their data platform and don't like to change. There is too much involved. "They have to retrain their people, it's expensive, they need to develop APIs [application programming interfaces] in order to grab and integrate the data to use throughout the organization, so it becomes very involved and difficult to get clients to upgrade," Tabb says.

"There are lots of market data systems that are basically orphaned -- [meaning they are no longer being upgraded] -- and they are not state of the art, but firms don't want to migrate to a new platform," Tabb adds.

Brittan understands this sentiment. "Our goal is still to transition existing customers to Eikon and to best serve our customers," he says. "We've got new customers and we've got a bunch of customers who have successfully migrated over. We're not forcing customers to change. We realize it's an organic thing. We will naturally see the migration in time if the product is the best product. It is relatively new just one year out, so we will move customers at the pace that they want to move."

WHATS NEXT?
Brittan notes that his focus has always been on people, process and product. And Thomson Reuters has been quietly building a team and working on rolling out new features. "We'll be rolling out new capabilities on close to a monthly basis. And in six months we'll have a bunch of new capabilities. I don't want to talk about them. I just plan to deliver them," he notes, declining to reveal the specific features on tap.

Perhaps the marketing and buzz around the initial launch of Eikon set unrealistic expectations. Aite's Lee agrees that expectations were high and that the industry expected all the bells and whistles in Version 1, when perhaps the marketing around Eikon was creating a vision of what Eikon would eventually become. He also understands that launching a new product takes several iterations. "It is true when new a product launches, there is ramp up time and a learning curve. It would not surprise me if this thing eventually stabilized and people use it."

Lee adds, "The important thing is to regroup, focus, get the right people involved, make sure they can gain traction in the market place so their next generation platform is in place and they can compete more effectively moving forward."

Regarding the high expectations the industry had for Eikon, "I think there are reasons that there are high expectations for our products," Brittan says. "We just need to deliver, and that's what we're doing. We won't be doing any heavy marketing. We're just going to put out an excellent product and let our customers decide," Brittan adds.

As a long time Reuters client (supporting and managing Market Data from the business side and to some extent the tech side, and as a former Thomson Reuters employee, I'm convinced that Eikon will become an excellent product. -áBut I've also observed a huge amount of (premature) hype, online postings by TR staff that tried to make it look like a magical cure for all trading data needs even while people testing it were complaining about performance and content issues. -á

TR continues to ignore a basic issue; traders and those who support them don't want to have to change platforms every several years - too much testing, too much retraining, too much rewriting of spreadsheets, just a huge disruption. -áThat's why Bloomberg is so popular. -áSure, their interface is antiquated and difficult to use. -áBut it hasn't materially changed in most ways in decades. -áIt gets little updates every month or so with very easy rollouts. -áBut on the TR side you've got Kobra users, Reuters Plus users, BridgeStation users, Thomson One users, maybe even Active 8 users who feel like every time they blink they need to move to a different platform. -áYes, Eikon is supposed to merge most of these. -áBut users have to assume that as soon as they finish migrating to Eikon that it too will become obsolete and be replaced by yet another platform. -áThey really don't care how good Eikon is; it just represents a huge expense in buying and migrating and a huge re-engineering and retraining effort that they can't readily justify. -áIn contrast, traders know that their clients all have Bloomberg terminals with much of the exact same data, and that once on Bloomberg they will probably be set for life on that platform.

There is no easy solution here, but maybe if TR made it clear that going forward there wouldn't be periodic platform replacements, and if they found ways to greatly reduce the migration cost, they'd get through this with a lot less pain for them and their clients. -áAnd they need to learn to listen better to clients, to provide what clients are asking for, rather then try to sell what they are hyping.